Term limits, tax cut bills appear in trouble in House

WASHINGTON -- Tax cuts and congressional term limits -- two central features of the House Republican "Contract with America" -- appeared to be in trouble yesterday as scores of GOP members openly challenged the leadership.

The latest rift came on the tax issue, as 102 of the 230 Republican members told House leaders to scale back the biggest element in the package -- a $500-per-child tax break for families earning up to $200,000.

Instead, under pressure from Democrats who have portrayed the proposal as a giveaway to the rich at the expense of the poor, they urged that the tax break be confined to families earning $95,000 or less.

The reduction would reduce the $190 billion tax package by $12 billion to $14 billion.

The internal party challenge -- combined with even stiffer opposition from conservative Democrats -- suggests that Republican leaders must make some accommodation or face defeat when the House votes on the key measure just before the April 6 recess.

"We haven't done a very a good job of responding to the class warfare strategy the Democrats have used against us," said Rep. Robert L. Ehrlich Jr. of Baltimore County. Mr. Ehrlich was one of the Republicans who signed a letter to Rep. Gerald B. H. Solomon of New York, the House Rules Committee chairman, asking that the middle-class tax cut be targeted more narrowly.

President Clinton proposed a similar plan late last year in which middle-class families would receive a phased-in $500-per-child tax credit.

No matter how the House resolves its differences, resistance to tax cuts remains strong in the Senate.

Sen. Bob Packwood of Oregon, chairman of the Finance Committee, which has jurisdiction over tax issues, said this week that the tax-cut package would undermine another promise in the conservative agenda: a commitment to balance the federal budget.

But yesterday, Senate Majority Leader Bob Dole of Kansas, who is running for the 1996 Republican presidential nomination, scoffed at the notion that a tax-cut package might not pass this year.

"In my view we are going to have a tax cut," Mr. Dole told reporters. "It's going to be substantial."

Yesterday's action came as the GOP House leaders raced to redeem their promise to bring their ambitious package of legislation to a vote within the first 100 days of Congress.

The legislation includes a politically popular constitutional amendment to limit congressional terms. It is scheduled to come to a House vote next week, but remains far short of the 290 votes needed to pass it.

"We hear they are not even going to make 230 votes," said Patrick Burns, a spokesman for U.S. Term Limits, an advocacy group. "We figure they are just trying to get the GOP leaders on board so they can blame the defeat of term limits on the Democrats."

There were problems for House Republicans on other fronts. Speaker Newt Gingrich was still negotiating with moderates in his own party last night to assure passage Friday of the sweeping Republican plan to remake the welfare system.

Republican leaders maintain that the welfare system needs a major overhaul to end what they call a cycle of dependency that discourages poor people from becoming independent of government handouts.

Critics, ranging from most Democrats to moderate Republicans, have called the welfare proposal unduly harsh, saying it would punish society's less fortunate, including millions of poor children.

About a third of the money Republicans have set aside to finance tax breaks would come from savings in the welfare program, including food stamps, school lunches and aid to children and pregnant women.

The proposal by the Republican rank and file to scale back the tax plan is relatively small in financial terms, but it would remove politically awkward tax breaks of $500 per child to families

earning between $95,000 and $200,000 a year.

The Democratic strategy of painting the Republicans as insensitive to the disadvantaged appeared to be confirmed by a Washington Post poll published yesterday, in which 59 percent of respondents said they believe the Republicans will "go too far" in helping the rich and in cutting services that benefit the less fortunate.

Democrats remained on the attack yesterday. Rep. Richard A. Gephardt of Missouri, the minority leader, said the proposal by GOP rank and file to scale back the tax package was "nothing more than a fig leaf for a party that has relentlessly, systematically starved Main Street to stuff Wall Street since the day they took power."

He further noted that the Republican package also includes a 25 percent reduction in the tax on capital gains, which Mr. Gephardt contends benefits primarily wealthy investors.

Mr. Gingrich took the obstacles in stride. "The whole Republican nTC Party has shown a level of team play . . . in diligently managing the contract . . . that's astonishing," the Georgia lawmaker told reporters yesterday.